Bruce Bartlett was a lieutenant in the Reagan revolution. As an aide to congressman Jack Kemp, he helped write the legislation underpinning Ronald Reagan's 1981 tax cut and then worked in the Reagan and the George H.W. Bush administrations.

For years, my budget consisted of an Excel spreadsheet that documented every purchase I made every single day of the year. As a numbers guy, this wealth of data was amazing and helped me tweak my spending, find my financial leaks, and reach financial goals much sooner than I would have without budgeting. Since then, I’ve been tentatively using online personal finance tools because of the security issue and instead I rely on Quicken’s desktop applicat

ion, which is one of the most comprehensive tools available.What if you just want to maintain a budget? Enter You Need A Budget. You Need A Budget, often called YNAB, is a desktop budgeting software package that will help you set, maintain, and stick to a budget. It’s a much better version of what I used to hack together in an Excel spreadsheet.

YNAB Methodology: Four RulesBefore we get into the review of You Need a Budget software itself, I wanted to write about the basic premise of the whole system. Budgeting is almost never about the tools but how the tools establish a framework for which to think about your budget. For example, with my Excel spreadsheet, I molded it to match my own budgeting mentality. If you very good with budgeting and love hacking around with Excel, then Excel is probably right for you. If your approach to budgeting is similar to YNAB’s methodology or if you have no approach, then you would do well to adopt the YNAB framework, with or without their software. You can budget with a pen and piece of paper, it’s just easier when you have a powerful application guiding you. The YNAB Methodology is YNAB’s approach to budgeting and establishes a good framework. The steps are:

Rule One: Stop Living Paycheck to Paycheck – A notebook won’t help you stop yourself from living paycheck to paycheck, but YNAB will. You will have two types of income, primary and supplemental. When you start the system, you’ll record all your income, even if it’s from your primary job, as “supplemental.” Supplemental means that you will be spending the income in the current month. You are, in a sense, living paycheck to paycheck because you spend the money in the month you earn it. As you work through the system, eventually you’ll reach a point where your job income will be listed as primary income, to be budgeted for use in the next month. This is important because when you go to the budget section, the income will appear in the next month. The tool has, in effect, taken you off living paycheck to paycheck.

Rule Two: Give Every Dollar a Job – This rule enforces zero-based budgeting, where every single dollar is assigned to a category. The value in budgeting like this is that you have accounted for every penny you have in your budget. So many times we just budget for the big things – food, rent, etc. The act of sitting down and setting these numbers is tremendously valuable because you’re actively making decisions, rather than letting things happen.

Rule Three: Save for a Rainy Day – This rule is less about the tool and more about the idea of creating various savings funds whether they’re for emergencies, annual taxes, holiday spending, etc. This fits in line with the zero-based budgeting because these are entries in your budget.

Rule Four: Roll with the Punches – This is a great feature of YNAB that a lot of other packages don’t have. What happens when you go over your budget? Most other packages warn you, tell you not to do it next time, and probably do nothing about it. YNAB will deduct it from next month’s available funds. This is good.

I especially love Rule Two, Give Every Dollar a Job, because it is the cornerstone of budgeting and, subsequently, the YNAB approach. They work off the zero-based budgeting system where ever single dollar you bring in is accounted for. If you earn $1,000 a month, every single dollar is earmarked for something before the month begins. If you are over or under, you adjust your budget accordingly the following month.On the tutorials page, there are short videos explaining how YNAB is used to support those four rules. I recommend watching them even if you have no intention of using YNAB because they easily explain some good budgeting principles. I found value in the rules themselves but having a video translate it into how it’s applied in YNAB was great.You Need A Budget & YNAB ProYou Need a Budget comes in two flavors, the basic edition and a Pro version. The basic version is going to be phased out soon so I didn’t want to spend too much time reviewing it. It’s a hardcore Excel spreadsheet, costs the same as the Pro version, and doesn’t contain as many features. They both work off the same YNAB Methodology, except with the Pro version you don’t need MS Excel because it is itself an app. (that ends the Basic review )If you had a chance to see the videos, then you have a general review of the features of the Pro version. The Pro version is a full desktop application and the free 7-day trial gives you access to every feature in the application. This isn’t a watered down trial, it’s the real deal. The trial is for seven days, instant digital download, and the full version is regularly $49.95. All that, full support, and it comes with a 30-day money-back guarantee.Importing DataNot every piece of data has to be manually entered into the register, YNAB is able to important OFX, QFX, QIF, and CSV files from major financial institutions. It’s the same files used by Quicken and MS Money and YNAB never asks for sensitive information. You visit the bank, you enter your credentials, and you download the files yourself. It’s an extra step but it’s secure because you aren’t giving a third party any sensitive information.ReportingYNAB has some pretty looking reporting features that include pie charts and bar graphs. Visualizing your budget is difficult when you’re just looking at a list of numbers and YNAB does a fine job display your spending in three easy to view charts. There is a pie chart that illustrates Spending by category, a bar graph that shows total spending across several months, and then a final one showing current balances of various categories.

2009 Income Tax Planner – This can help you plan for your 2009 tax return.

YNAB Retirement Planner – You can use this spreadsheet to help plan your retirement, including contingency plans.

YNAB Mortgage Analyzer – If you have a mortgage, you can use this spreadsheet to help figure out how to pay it down faster, whether a refinance makes sense, etc.

YNAB Car Maintenance Schedule – Need a little help figuring out when you should be bringing the clunker in for maintenance? This spreadsheet can help you out on that.

I have not seen these spreadsheets first hand so I can’t make a determination of how good they are.YNAB Version 3.0YNAB is going to get a huge facelift for YNAB version 3.0 and will include significant feature additions. Here’s a look at the Register screen getting an update. It looks a lot slicker, doesn’t it? Well in addition to a new look and feel, they’ll be adding a lot of search capabilities, improved scheduling features, a more customizable approach to rule four, and many other features. It’s set to launch in November 2009.

If you purchase YNAB before YNAB 3.0 is released, you are upgraded to YNAB 3.0 for free. It’s unclear how much YNAB 3.0 will be selling for but you can lock in the price if you purchase YNAB 2.0.

Live Online Budgeting ClassesAnother nice feature I am 100% certain other budgeting packages don’t offer are free classes. If you are not good at budgeting or would like to take advantage of live classes that introduce you to the YNAB system and how to manage your finances, YNAB offers absolutely free classes several times a month. You can review the schedule to see what’s available. Classes are free, are limited to forty attendees, and include a live Q&A at the end of the session.Finally, don’t take my word for it, you can see a ton of reviews on Amazon.com for YNAB Pro. The vast majority of reviewers rated it a 4 or 5 star product. One warning, I recommend you buy it directly from YNAB because if you buy it from Amazon you may not be able to upgrade to YNAB 3.0 for free.ConclusionWhew! That pretty much covers the YNAB system, YNAB 2.0, and even a look forward to YNAB 3.0 scheduled for release in about a month or two. When I first started this, I had no idea what I was getting myself into. This is quite possibly one of the longest reviews I’ve written in part because the product has so many features, is built on a sound financial foundation, and is about to release a brand new, soup to nuts, version in 3.0.If you’ve been searching around for budgeting software, I recommend giving YNAB a look because with their 7 day trial, you can get a good sense of whether it’s right for you.

You already know that to protect yourself against stock market meltdowns, you should devote more of your portfolio to bonds as you age. But as you may have discovered recently, the downside protection you get can vary dramatically depending on the type of bonds you own.

As you might remember from a few days ago, my money vice is vacations. So I’m always on the lookout for things that will make our travel cheaper, which included signing up for the Travelzoo Top 20 deals email newsletter. I’ve been getting the weekly emails, plus some unscheduled last-minute offers or promotions, for the last few

months and the deals have been pretty astounding. I think it has to do with the recession and the last minute nature of many of the offers. If you’re flexible, you can get some amazing rates on cruises, flights, hotels, and shows.Dunhill Vacations is another company like Travelzoo. They’re not a travel agency but a deal collector and publisher. Their main website lists a bunch of offers and while they don’t have a “top 20″ list, they do have plenty offers listed. There isn’t much more to say other than that I signed up for their free newsletter and you can to if you’re interested. I haven’t received one yet but I think it’ll probably be a lot like Travelzoo’s emails. (and like Travelzoo, they don’t sell your information, which is very important)If you’re already a subscriber, I’d love to hear your thoughts on it. I figure that it’s free and I can unsubscribe whenever I want so I might as well. You never know, you might save a few bucks or find some insane last minute deal that makes it all worth it. Dunhill Vacations Travel Deals Newsletter from personal finance blog Bargaineering.com.

Airfares are at their lowest levels in years, so airlines are trying to find new ways to make money. And that means extra fees -- more than $1 billion from last year alone, according to the Department of Transportation.

In normal times, unemployment benefits last twenty-six weeks after someone loses their job. In normal times, it takes newly unemployed people less than 26 weeks to find a job… until today. But we aren’t in normal times. According to data from the Bureau of Labor Statistics, this is the first time since 1948, when they started collecting this information, that the average time it takes to find a job is longer than the 26 weeks of state unemployment benefits.The House of Representatives passed a bill last month

(H.R. 3548) that would extend unemployment benefits in high-unemployment states by 13 weeks. The Senate is debating similar bills (S. 1699 was referred to committee) and the fight is over who gets benefits and how much. S. 1699 would give an extra 13 weeks to states with unemployment rates higher than 8.5% funded by extending unemployment tax on employers.

These last few months emphasize how important it is to have an emergency fund. Standard unemployment benefits offer six months of income, if everyone had a six month emergency fund then it would matter less if the average time to find a job was longer than 26 weeks. People would still have money saved to pay for things.Should we be taxing employers and giving the money to people without jobs? I’m not against helping people who are in trouble, we all should try to look out for each other, but this may be the wrong way to go about it. I think that companies they need to pay extra for the people they already hire, they probably will be hiring less. Fewer new jobs means longer employment periods and higher rates. Is this the right direction anyway?Unemployment Benefits Extension Stalls in Senate from personal finance blog Bargaineering.com.

We all have one. We all have that hobby we know we spend too much money on. Maybe you drop a paycheck or two every time you walk into Williams Sonoma because of some gadget you have to have. Or your spending goes unchecked on vacation, picking up trinkets and souvenirs from your getaways. Perhaps you’re a gadget hound and are the first on your block to get the latest electronic gizmo.Whatever it is… you know you have one and I want to know what it is.

nd I love going on vacations (hence our new labor of love, travel blog Wanderlust Journey!) and when we do, we like to eat at nice restaurants, visit all the nice sights, and buy a few souvenirs along the way. We aren’t the knick knack types, but my wife loves sending postcards and I love making sure she actually gets around to sending them from the country on the face of the card!One caveat, we do budget (a little) on our trips. We set a total trip budget that is usually very large, divide it up by the number of days, and then run with it. This keeps up a little grounded while we’re in a totally fun and foreign place. Trip budgets, in general, are usually high because they include things you don’t normally think about in a budget, like your lodging and all of your meals. I like to set our trip budgets high because I know I like to spend. If you’re going to pay so much for a flight somewhere, you might as well maximize the fun while you’re there!So out with it… what’s your money vice?(Photo: Wanderlust Journey)Your Take: What is Your Money Vice? from personal finance blog Bargaineering.com.

Question: My wife and I keep $20,000 in a passbook savings account as an emergency reserve. What's driving me crazy is that we're getting only 60 cents a month in interest. I like the security of the account and the immediate access, but 60 cents a month on 20 grand???? How can I do better? --Dale F., Waldorf, Maryland

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